Aged care operator Estia Health (ASX: EHE) has secured Federal Court approval for a settlement of a class action against the company over an alleged failure to uphold market disclosure obligations between 2015 and 2016
$38.4 million is the total amount of monetary compensation, $12.35 million of which derived directly from Estia. The remainder was covered under the company’s insurance contracts.
Law firm Phi Finney McDonald filed the lawsuit on behalf of shareholders who acquired an interest in Estia between 12 August 2015 and 6 October 2016.
The plaintiffs claimed that Estia misinformed investors about the serious difficulties associated with the incorporation of its acquisition Kennedy Health Care in 2016.
The law firm aimed to “hold Estia accountable for conduct which caused its securities to trade at an artificially inflated price”.
The settlement has cleared Estia of any liability.
Shares in Estia Health (ASX:EHE)
are trading 2.04 per cent higher at 2.50